EXCLUSIVE: Myanmar regulator reveals who will benefit first from new Telecom law

Author: | Published: 21 Mar 2012

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Myanmars telecommunications regulator expects
special orders allowing domestic companies to provide telecom
services to be issued before a proposed new telecommunications
law is enacted.

Myanmars Post & Telecommunications
Department (PTD) this week revealed the countrys outdated
telecommunications market was set to open up to foreign
investment througha new lawwhich will see four new telecom
licenses awarded to both domestic and foreign operators.
Foreign companies were previously prohibited from holding such
licenses in the country.

PTD deputy director Than Htun Aung told IFLR he did
not expect the law to come into effect for up to six months to
one year as it first required approval from the countrys
attorney general, as well the Myanmar cabinet and
parliament.

But he said the government could allow local entrants into
the market before the law became effective by way of
notification and special orders to provide telecom services in
Myanmar.

It is difficult to say when and how this will happen,
but it could be as soon as tomorrow, he said.

The new law would treat domestic and foreign operators the
same, he said. But the license approval process will differ
with domestic operator licenses subject to ministerial approval
and foreign operator licenses subject to both ministerial and
government approval.

The license selection criteria would be based on the
availability of resources, such as mobile frequency, amount of
investment capital and the effect an operator will have on the
country and people, he said. He stressed no region would be
given preferential status.

A number of well-known global operators had already
expressed interest in applying for a license in the country, he
said.

Were not really concerned that our legal system
or lack of infrastructure will deter foreign operators,
he said. We have already seen a lot of interest from
global players as well as ASEAN and Asian operators.

We try to have a strong legal system to protect the
operators as well as consumers, he added.

The plans to issue a new
telecoms law was first highlighted in
a research report published by Nomura Securities last week.
The note, the first Myanmar research note to be issued by a
major investment bank, saidthe telecom sector in
Myanmar was likely to be on the radar of most Telcos for
incremental investment.

With around 60
million people and only 4% wireless penetration and 3% fixed,
Myanmar is one of the last untapped telco markets in the
region, it read.

The notes author, Nomura
Securities managing director and Asian telecoms
research head Sachin Gupta told IFLR the domestic appetite
for investment in Myanmars telecom was uncertain. But
Middle East and Asian operators had been keen to invest in the
country from some time.

Singapore Telecommunications and Axiata were listed in the
report as stocks to watch.

SingTel already has a strong presence in many
countries in the region and would therefore be well placed to
connect Myanmar with its regional market infrastructure
quickly, he said.

He warned, however, that entrants might have to be willing
to quickly invest in the countrys infrastructure. But he
expected first-movers to be well rewarded.

It is very hard to justify more than two or three
telecom operators being able to build a viable business over
the long term in Myanmar, he said. GDP per capita
is quite low in the country which lowers the potential customer
basis. Those first in will be able to tap into Myanmars
high-end customers.

Reform of the sector should go hand-in-hand with the
countrys economic reforms, he said, and should create
tremendous opportunities. But timing was currently the biggest
uncertainty.

Than Htun Aung said the new law will introduce competition
to the sector which would be beneficial for both the nation and
its people.